The Malta Independent
I just don`t get it why pension reform should be any issue related to EP elections. It just shows the low quality politics that citizens of these islands are getting and why we never seem to pre-empt problems rather than just address them or, quite often, ignore them.
The lack of sustainability of the current pension structure is not something that can be pinned on this or any particular previous government. It is a problem we created collectively mostly through` registering success in improving our quality of life by leaps and bounds since the pensions system was first introduced in 1956 and then overhauled in 1979.
It is a problem created mostly through our success to extend the expected life beyond pension age from six years to twenty years. Any system meant to sustain pension benefits for six years will have problems to do the same over 20 years. Add to this the demographics of low birth rate following the post-war baby boom and social elements in the current system where benefits are very loosely related to the contributions, and there should be at least one thing over which consensus should be easy.
This is that the current system is unsustainable. That doing nothing is not an option. That if we just leave the problem for posterity the result of our inaction will be a strong double negative. A huge burden on public finance to make up for the increasing annual deficit of the pension system and insufficiency of the benefits to maintain reasonable standards of living for pensioners as the two thirds concept will only apply, through the capping mechanism, to those retiring on a relatively low salary.
Pensions are therefore everybody`s problems. It is the duty of the government to bring out this problem into the open and to make it a priority on the national agenda so that those still far away from pension, with a time frame permitting for provision of supplementary retirement benefits, can adjust their consumption and savings pattern in good time before it is too late.
It is therefore incomprehensible why government is treating the various reports and studies it has on the subject, including the latest on from the World Bank, as if they were the Fatima secret. It is just as equally disgusting that the opposition chose to make this government weakness as an election issue for the EP election inferring that Labour MEP`s could somehow provide a solution to our pensions problems.
I commend that the opposition should fill the void left by the government and publish and comment on all the aspects of the pension problems to raise awareness thereof at ground zero. But doing so as part of an electoral campaign and giving the impression that the problem can be solved by the mere election of Labour MEP`s can only be interpreted as clutching at straws by whoever is seeing these relatively unimportant MEP elections as a personal survival issue.
Reality is that proper handling of the pension problem is probably in the interest of the opposition more than that of the government. Pension is one of those problems with a long lead time. It can be easily previewed to reach its climax in a time frame between the years 2012 and 2025.
With next election not due before 2008 this period when the pension problem should peak is most likely to be a period when the current opposition will be in government unless this country is going to have a permanent state of elected dictatorship. So the opposition has every incentive to help firstly in raising the public`s awareness to the problem and secondly in avoiding to give the impression that the problem can be solved by doing nothing about it and can be solved by simply electing a new government capable of generating higher economic growth.
Of course strong economic growth will make all problems more manageable. Of course increased female participation rate could for some time ease the pension problem or extend its peak into the future as such female participants, who normally generate `much less than 30 years contributions, would eventually become entitled to benefits in their own right often unrelated to the value of the contributions paid.
But these, on their own, will not solve the pension problem. The unavoidable truth is that keeping the present retirement age at 61 and burdening the pension system with an average of 20 years benefit period for each retiree is just unworkable. The maths just does not add up. You can turn the problem upside down, left and right, inside and out the present retirement age is unsustainable.` And to avoid sharp shock adjustments during a time when Labour could expect to be in government there is every reason for the opposition to join the government in a joint effort to address the problem in a national front where the maths is allowed to speak to fill the void of pious hope.
The government should on the other hand stop tinkering about the pension issue and make it a national agenda item regarding which the opposition is to be offered a meaningful role.
I just don`t get it why pension reform should be any issue related to EP elections. It just shows the low quality politics that citizens of these islands are getting and why we never seem to pre-empt problems rather than just address them or, quite often, ignore them.
The lack of sustainability of the current pension structure is not something that can be pinned on this or any particular previous government. It is a problem we created collectively mostly through` registering success in improving our quality of life by leaps and bounds since the pensions system was first introduced in 1956 and then overhauled in 1979.
It is a problem created mostly through our success to extend the expected life beyond pension age from six years to twenty years. Any system meant to sustain pension benefits for six years will have problems to do the same over 20 years. Add to this the demographics of low birth rate following the post-war baby boom and social elements in the current system where benefits are very loosely related to the contributions, and there should be at least one thing over which consensus should be easy.
This is that the current system is unsustainable. That doing nothing is not an option. That if we just leave the problem for posterity the result of our inaction will be a strong double negative. A huge burden on public finance to make up for the increasing annual deficit of the pension system and insufficiency of the benefits to maintain reasonable standards of living for pensioners as the two thirds concept will only apply, through the capping mechanism, to those retiring on a relatively low salary.
Pensions are therefore everybody`s problems. It is the duty of the government to bring out this problem into the open and to make it a priority on the national agenda so that those still far away from pension, with a time frame permitting for provision of supplementary retirement benefits, can adjust their consumption and savings pattern in good time before it is too late.
It is therefore incomprehensible why government is treating the various reports and studies it has on the subject, including the latest on from the World Bank, as if they were the Fatima secret. It is just as equally disgusting that the opposition chose to make this government weakness as an election issue for the EP election inferring that Labour MEP`s could somehow provide a solution to our pensions problems.
I commend that the opposition should fill the void left by the government and publish and comment on all the aspects of the pension problems to raise awareness thereof at ground zero. But doing so as part of an electoral campaign and giving the impression that the problem can be solved by the mere election of Labour MEP`s can only be interpreted as clutching at straws by whoever is seeing these relatively unimportant MEP elections as a personal survival issue.
Reality is that proper handling of the pension problem is probably in the interest of the opposition more than that of the government. Pension is one of those problems with a long lead time. It can be easily previewed to reach its climax in a time frame between the years 2012 and 2025.
With next election not due before 2008 this period when the pension problem should peak is most likely to be a period when the current opposition will be in government unless this country is going to have a permanent state of elected dictatorship. So the opposition has every incentive to help firstly in raising the public`s awareness to the problem and secondly in avoiding to give the impression that the problem can be solved by doing nothing about it and can be solved by simply electing a new government capable of generating higher economic growth.
Of course strong economic growth will make all problems more manageable. Of course increased female participation rate could for some time ease the pension problem or extend its peak into the future as such female participants, who normally generate `much less than 30 years contributions, would eventually become entitled to benefits in their own right often unrelated to the value of the contributions paid.
But these, on their own, will not solve the pension problem. The unavoidable truth is that keeping the present retirement age at 61 and burdening the pension system with an average of 20 years benefit period for each retiree is just unworkable. The maths just does not add up. You can turn the problem upside down, left and right, inside and out the present retirement age is unsustainable.` And to avoid sharp shock adjustments during a time when Labour could expect to be in government there is every reason for the opposition to join the government in a joint effort to address the problem in a national front where the maths is allowed to speak to fill the void of pious hope.
The government should on the other hand stop tinkering about the pension issue and make it a national agenda item regarding which the opposition is to be offered a meaningful role.
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